سه رکن از تئوری سازمانی و سرمایه گذاری مستقیم خارجی در امریکا لاتین : فرایند نهادینه شدن
|کد مقاله||سال انتشار||تعداد صفحات مقاله انگلیسی||ترجمه فارسی|
|19790||2008||16 صفحه PDF||سفارش دهید|
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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : International Business Review, Volume 17, Issue 1, February 2008, Pages 118–133
This paper describes the process of institutionalization and legitimization in countries in Latin America and its impact on organizational decision-making regarding inward foreign direct investment (FDI). It argues that institutionalization is a process that works through all three pillars—cognitive, normative, and regulative—and that this process can legitimize a host market for foreign investors. The study examines institutional reform in 16 Latin American countries using several indices of institutional change occurring between 1970 and 2000. Results indicate that institutional processes that legitimize more effectively through the cognitive and normative pillars (e.g. educational attainment, bilateral investment treaties, privatization, and political uncertainty) are better indicators of inward FDI than those that legitimize primarily through the regulative pillar (e.g. tax reform, trade reform, and financial account liberalization).
Although the relationship between organizational decision-making, foreign direct investment (FDI), and institutional theory has been widely studied, knowledge of this subject stems primarily from the economic version of “New Institutionalism” that focuses almost exclusively on economic efficiency (Mudambi & Navarra, 2002; North, 1990; Williamson, 1985). The international business community's understanding of this subject may be limited, however, inasmuch as all forms of institutions that manage human interactions via cognitive, normative, and regulative processes influence organizational decision-making (Scott, 1995). In fact, although Grosse and Trevino (2005) acknowledged that all three institutional pillars provide a basis for analysis when it comes to organizational decision-making and FDI, their research failed to incorporate either the cultural-cognitive or the normative dimensions. Failure to include the cognitive or normative pillars into models of FDI location leads to an incomplete understanding of the impact that institutions have on FDI decision-making. The present study on FDI in Latin American corrects for this gap in extant literature and extends institutional theory in several ways. First, this study answers the call to develop a more comprehensive understanding of the institutional environment–FDI decision-making interface in developing economies (Hoskisson, Eden, Lau, & Wright, 2000). We develop such a model by incorporating all three pillars of institutional theory in a single model. Second, in contrast to the approach taken by Scott (1995) and Kostova (1997), we posit that institution building is a process and not a typology. Under this approach, we do not force institutional constructs that may influence behavior into categories such as cognitive, normative, or regulative. Rather, we theorize that these pillars represent the underlying processes that lead to institutional change, ultimately influencing firm-level organizational outcomes. Third, liberalization policies, market reforms, and inflows of FDI have varied considerably in Latin America, both cross-sectionally and longitudinally. As such, and in response to North (1990), who said that change is decidedly incremental, the present study examines the impact of institutionalization over an extended timeframe (31 years), thus allowing for the emergence of institutions. In summary, the objective of the current paper is to demonstrate that host country institution building is a process that works through all three pillars of institutional theory to affect foreign investors’ perceptions of the host country as a potential production location.
نتیجه گیری انگلیسی
Our approach to institution building and inward FDI in Latin America advances conventional wisdom of institutional theory that sees institutional constructs as fitting neatly into typologies. Instead, we have demonstrated that all three pillars—cognitive, normative, and regulative—matter in terms of institution building in Latin America, but that different constructs legitimize more efficiently through some lenses than through others, and that this affects the process of institutionalization. We extend extant literature on institutional theory by arguing that, in addition to the need to classify institutional types (cognitive, normative, and regulative), it is critical to classify the process within which institutionalization and legitimization works through all three pillars. Interestingly, those constructs that legitimize more strongly through the cognitive and normative pillars (i.e. educational attainment, BITs, privatization, and political uncertainty) were found to be significant indicators of inward FDI in Latin America, whereas those constructs which rested more firmly on the regulative pillar (i.e. tax reform, trade reform, and financial account liberalization) were not significant indicators of inward FDI in the region. We have undertaken exploratory research that demonstrates that all institutions work through a process, the foundation of which is the three pillars of institutional theory. Unlike previous studies, we have not attempted to force fit constructs into typologies. We argue that an actor or a group of actors (i.e. cognitive pillar) must initiate institutional change at the level of the nation state. Once a construct begins to take hold, the initial cognitive action can lead to normative social institutions. We have argued that the regulative component of a country’s institutional profile has been widely studied in previous FDI research because these constructs are tangible, and hence easier to quantify than constructs that are rooted more firmly in either the cognitive or the normative pillars. Because the enforcement mechanisms of constructs rooted in the regulative pillar are largely coercive, such as in the case of tax reforms, we believe that this inhibits their ability to influence organizational behavior of outside actors who have choices (e.g. foreign direct investors). Rather, it is constructs such as privatization and education, whose regulative component is not nearly as strong, but whose symbolic representation has a greater impact on organizational choice, at least in the case of the decision to initiate production in a country that has undergone significant institution building. The present study suggests that, although governments should focus on initiating reform at all levels (i.e. cognitive, normative, and regulative), it is those changes that have fewer regulations and that are intangible that demonstrate a commitment to openness to foreigners. It is only when foreign actors believe that institutional change has occurred and is permanent that they will make an organizational commitment in the form of inward FDI. By breaking away from the conventional approach to institutional change (Kostova, 1997; Scott, 1995) that sees constructs as largely categorical, we have demonstrated that institutionalization is a process that works through all three pillars and is one that takes time. We have provided empirical evidence that those constructs that are intangible and that focus less on regulations lead to greater levels of inward FDI. This study has several limitations. Although we believe that our results will prove to be generalizable, our focus on Latin American prevents us from making broad generalizations. As data bases become available for other regions of the world (e.g. Asia, Central and Eastern Europe) to enable researchers to study the institutionalization process over sufficiently extended periods of time to enable institution building to develop roots, the international business community will gain a greater understanding of how the institutionalization process unfolds. Future studies could further refine our model methodologically, in which we propose a tiered process of institution building, where the cognitive pillar usually initiates the process, followed by the normative and or the regulative pillars.